Gold price slips from three-week high as dollar ticks up

London (Oct 12) - Gold slipped from a three-week peak on
Monday as the dollar recovered some ground, but the prospect of
more U.S. coronavirus relief spending and uncertainty
surrounding next month's U.S. presidential election put a floor
under prices.

Spot gold was down 0.5% at $1,919.50 per ounce by
1105 GMT, after hitting its highest since Sept. 21 at $1,932.96
earlier in the session. U.S. gold futures         were steady at
$1,927.10.

"We've seen a bit of a modest dollar rebound," said Michael
Hewson, chief market analyst at CMC Markets UK.

"I'm still very much of the opinion that we need to buy in
the dip, as ultimately, the prospect of further stimulus post
the U.S. election is helping support gold prices," he added.

The dollar index rose 0.1%, crawling away from a
three-week low touched in the previous session. A stronger
dollar tends to weigh on gold by making it more expensive for
holders of other currencies.      

Gold, which has gained over 27% so far this year, tends to
benefit from stimulus spending because it is considered a hedge
against inflation risks and currency weakening. It is also in
demand at times of heightened market uncertainty.

The Trump administration on Sunday called on Congress to
pass a stripped-down coronavirus relief bill using leftover
funds, as negotiations on a broader package stalled ahead of the
Nov. 3 presidential election.            

We are in a wait-and-see scenario, as investors try to
understand what is going to happen in early November with the
U.S. election and the subsequent reaction of both stocks and
currency markets," ActivTrades chief analyst Carlo Alberto De
Casa said in a note.           

Elsewhere, silver slipped 0.5% to $25.01 per ounce,
platinum fell 0.7% to $880.27, while palladium      
edged 0.2% higher to $2,443.04.

Reuters